A.M. Best has affirmed the financial strength rating of “A (Excellent)” and the long-term issuer credit rating of “a” of Park Assurance Company, the single parent captive of JPMorgan Chase & Co.
The ratings reflect the captive’s “excellent” risk-adjusted capitalisation, operating performance, liquidity position, risk management strategy, and practices and investment strategy, according to A.M. Best.
The ratings agency suggested that as a single-parent captive, Park Assurance provides JP Morgan Chase with “very high” insurance limits and insures some properties with “substantial” insured values.
Coverage lines of the captive include terrorism, workers compensation, auto liability and general liability.
A.M. Best noted that these coverages are “key components” of JPMorgan Chase’s risk management strategy, and that Park Assurance benefits from the group’s “significant” financial resources.
In addition, JPMorgan Chase benefits from the group’s risk mitigation and safety programmes.
A.M. Best said: “As Park reinsures a large portion of its global property programme, its exposure to underwriting losses is minimal, barring significant losses from terrorism.”
Park Assurance also remains dependent on the protection of the Terrorism Risk Insurance Program Reauthorization Act of 2015 (TRIPRA), and while the TRIPRA programme offers significant protection from terrorism losses, A.M Best suggested that the net impact on Park “could still be burdensome”.
A.M. Best added: “Park Assurance’s enterprise risk management practices as strong given its close alignment with its parent and the positive impact JPMorgan Chase has on Park Assurance’s corporate risk culture and its ability to measure, manage and mitigate risk in a prudent and optimal manner.”
“Other factors considered in the rating process include, but are not limited to, the diversification in line of business and geography and the explicit and implied support and commitment of its parent.”
